Group psychology in a corporate setting, particularly on a board of directors, can have significant effects on decision making and the overall functioning of the organization.
Group psychology can have significant effects on the decision making and overall functioning of a board of directors. To mitigate these effects, boards must create a culture that encourages open communication, diverse perspectives, independent analysis and accountability.
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Groupthink: This is a phenomenon where members of a group prioritize consensus and harmony over critical thinking and independent analysis. As a result, decisions made by the group can be one-sided and not fully informed.
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Social Loafing: This refers to the tendency of individuals to decrease their effort and take a backseat in group settings, as they feel their individual contributions will not be noticed. This can lead to decreased motivation and decreased overall productivity.
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Group Polarization: This refers to the phenomenon where individuals become more extreme in their opinions after engaging in group discussions, as they are influenced by the opinions of others in the group.
To mitigate the effects of group psychology on boards, it is important for the board to encourage open communication, independent thinking, and diverse perspectives. This can be achieved by:
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Encouraging dissenting opinions: By creating a safe and supportive environment for individuals to express their dissenting opinions, boards can avoid groupthink and ensure that all perspectives are considered.
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Promoting accountability: By establishing clear roles, responsibilities and expectations for individual members of the board, boards can help to reduce social loafing and increase motivation and engagement.
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Encouraging diversity: By having a mix of personalities, backgrounds and perspectives on the board, boards can reduce the risk of group polarization and ensure that all viewpoints are considered.
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Encouraging independent analysis: By providing training and resources for board members to conduct independent analysis, boards can help to ensure that decisions are informed and well-reasoned.
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